The UK Labour government plans to introduce a unified regulatory framework for cryptocurrencies in early 2025. The new rules aim to simplify oversight, address stablecoins, and clarify the legal status of staking, signalling the country’s intent to remain competitive in the global crypto space.
Announced at the City & Financial Global Tokenisation Summit, the framework replaces existing payment service regulations governing stablecoins, better aligning with their role as asset-backed digital currencies. Stablecoins have become essential for crypto trading and payments, offering faster and cheaper settlement than traditional banking systems.
Staking to Be Defined as a Technology Service
The proposed framework will also address staking, where users lock tokens to support blockchain operations and earn rewards. The government supports treating staking as a technology service rather than a collective investment scheme, which would subject it to stricter regulations. Tulip Siddiq, Economic Secretary to the Treasury, emphasised that this approach aligns with industry needs.
Learning from EU’s Crypto Lead
The UK’s regulatory push comes in response to competition from the EU, which is set to implement its Markets in Cryptoassets (MiCA) regulation by late 2024. Experts warn that delays in establishing clear rules could see the UK fall behind in attracting crypto innovation and economic growth.
A Simplified Approach to Innovation
The Labour government’s initiative consolidates crypto regulations into a single framework, a move Siddiq described as “simpler and more sensible” than piecemeal reforms. This step also aims to recover lost momentum after delays under the previous Conservative government.
Industry leaders, including Paybis founder Innokenty Isers, have welcomed the move, noting it as a critical step to attract innovation. “The EU has set the tone with MiCA. If the UK doesn’t act, it risks missing the next wave of financial transformation,” Isers stated.
With this framework, the UK seeks to establish itself as a hub for the evolving digital asset landscape while providing clarity for businesses and consumers.
